The Indian rupee witnessed a drop of 11 paise, falling to 85.75 against the US dollar in early trading on Thursday, primarily due to a strong dollar index and higher US 10-year bond yields.
Forex traders attributed the rupee's decline to the sustained upward momentum of the dollar, which has strengthened against most global currencies throughout 2024 and continues to maintain a solid position into the new year. Additionally, ongoing foreign fund outflows have further dampened investor sentiment, adding pressure on the local currency.

Global markets are expected to see low trading volumes in the near term, as major economies such as the UK and Europe are still in the holiday season. At the interbank foreign exchange, the rupee initially opened at 85.69 but slipped further to 85.75 against the greenback, marking an 11-paise drop compared to its previous close. On Wednesday, the rupee ended almost unchanged at 85.64 against the dollar.